tv First Business FOX September 28, 2012 4:00am-4:30am PDT
financial news, analysis, and today's investment ideas. goood morning. it's friday, september 28th, the final trading day of the month. i'm angela miles. in today's first look: an improving job picture. a surprising revealtion about how many jobs have been added by to the labor market gave a lift to stocks, gold and oil. we'll have more on the details of the re-count in just a bit. in earnings after hours, research in motion topped expectations by selling more blackberrys than predicted. prudential plans to buy hartford's life insurance unit and another record on mortgage rates. the 30-year fixed fell to 3.40%, the 15 dropped to 2.73% time now to take a look at the markets, and matt shapiro, president of mws capital, joins us for a closer look. matt, how much do you think the markets
will key off earnings from nike and research in motion today? > > well, we've got the end of the quarter, a little bit of window dressing, and people are snapping up rim, because it didn't lose as much as people think, and when you look at the numbers, they have a lot of cash - just about a $4-billion company - and although their products have been a disaster, it's sort of like a slice-and- dice - what's it worth with their installed base, angie? > > matt, you're a big money manager, so you too have to do some window dressing. what stocks are you buying or maybe even selling? > > you know, the last few days we had a little bit of a soft market. the market had fallen, what angie?, like six out of seven days. finally it snapped back yesterday. i'm looking at a couple names i really like. one thing i talked about on the show was national oilwell varco, which, two days ago, fell below $80, which was sort of a spot where i wanted to buy it. now, of course, i have been looking at these all-american names. one stock that had earnings last night was nike.
biggest apparel manufacturer in sporting goods and shoes, of course. their earnings were pretty good. some of the margins weren't so good, so the stock was down a little soft after hours, but of course, an all- american, iconic brand name, and i think that's really where the action is. we have rim up big this morning - $8 stock now, but these $90 stocks, $150 stocks, $80 for national oil well, seem to be where the money is being made right now. > > matt shapiro, president of mws capital. thanks matt. > > you got it. traders will take cues off of comments from french president francois hollande as he lays out his 2013 budget plan. it's expected to contain spending cuts, along with a small rise in taxes. meanwhile, protests continue in greece and spain as those governments plan severe spending cuts on wages and pensions. leaders in spain expect a soft recession and aim for a 4.5 gdp, with an emphasis on cuts versus tax hikes. in greece, government officials approved an austerity package with spending cuts and fresh tax revenues needed to secure eu-imf loans. the government found nearly 400,000 jobs that went un- reported. each year, the labor
department revises employment data. a preliminary revision shows 386,000 more jobs were created in the year ending in march than were reported, which means at least an extra 30,000 jobs were added each month, translating into 133.2 million people working versus 132.8. the .03% job gain is within the standard range of revisions. labor relations observers say the u.s. is seeing a rise in labor disputes leading to public protests and walkouts within the last year-and-a-half. in our cover story, why is labor using these tools, and will it continue? from public employees in wisconsin and chicago to the private sector - at american airlines, caterpiller and nfl referees - labor is sounding off. "...corporate greed has got to go." "in this last year or two, there's been an outbreak of high-profile cases, so many in fact, which may signal the possibility that we'll see
additional ones." why is it happening? some believe the recession has improved just enough to the point where resentment from cutbacks and layoffs - resentment held in check - is now reaching the surface. "we're seeing an explosion in labor-management conflict from recession. people feel as though they've been given a bad deal, so there's a 'festering' effect." the 121 referees in the nfl are a small and highly-specialized labor force. last sunday's controversial game-ending call in seattle proved just how hard they were to replace. "you never want to see a game end like that." "it's the first time i can recall a labor dispute affecting the integrity of the product itself." but the same tactic may not necessarily work for other labor groups. did the strike at caterpillar affect the product? "you're not seeing caterpiller equipment falling apart."
"employee groups with less leverage don't dare play that game. manufacturing workers, service employees, they're in a tougher spot." for the record, the nfl refs will go from 149,000 a year for their part-time work to 173,000 a year. veteran refs will continue their pension plans another five years, but after that, they'll join newly-hired refs in 401k retirement plans. observers say it is too soon to say that labor-management relations have reached a tipping point now favoring labor. lately, unions have still lost about as often as they've won. a new film is accused of shedding a poor light on teacher unions. "won't back down," which portrays a mother and a teacher attempting to fix a run-down school, opens this weekend. but the president of the american federation of
teachers tells first business the movie focuses too much blame on the the union for the school's problems, while passing over the work eachers do as well as teachers buying school supplies with their own money. producer mark johnson tells the la times he's surprised by the reaction. homebuilders are starting to shake the dust off projects now that the housing market shows signs of healing. the case- shiller home price index - out this week - jumped nearly 6%, far past the 0.4% at the same time last year. the number of foreclosed homes is falling, and banks and lenders have reported stronger demand for loans than in the last three years. rising inventories in some states indicate that demand is catching up with the supply of homes already on the market - and building is up in some states to accommodate it. frank sorrentino, ceo of north jersey community bank, said contractors are starting to jump back in. "if they do have capital sitting on the sidelines, that's earning less than 1%, and i think that is what the fed is trying to do to get people to take on that risk-reward
scenario. i think this is a great time to take on that risk." sorrentino also noted in certain markets there are even bidding wars on homes. campbell's soup is shutting the doors to two of its factories. the soupmaker will cut 700 jobs in phases during the closure of a plant in sacramento. the doors of a new jersey spice plant will also close. the company blames lower volume sales of canned goods. executives at a popular mattress company are hoping for king- sized profits. tempur-pedic is gaining market share by acquiring rival sealy corp. tempur-pedic shelled out around $228 million for sealy. the deal will form the world's largest mattress company, although both companies will still run independently. it's expected the deal will be final at the beginning of next year. sears and darden restaurants are taking a shot a benefit shopping. the companies are giving employees lump sum checks and letting workers choose medical coverage online. other u.s. employers will keep a close eye on the companies to
see if the program works. it might spark a change in the way other benefits are handled in the workplace, such as 401ks. the map app fight may be over. reportedly, google plans to release a map application for iphones and ipads by the end of the year. but apple fans are disappointed in the number of problems with the maps, including incorrect addresses and mislabeled landmarks. apple claims the glitches in its map app will be fixed over time. google has not yet given details on its map app. savvy travelers are sharing their secrets. when asked by go airport express how to save money on hotels, 45% said book rooms in advance. 31% use membership discounts sauch as aaa and aarp, while 26% turn to the internet, using sites including priceline. taking advantage of hotel loyalty programs was also mentioned. starbucks' single-serve coffee machine is a hit. the company
sold out of some models of its "verismo" single-serve coffeemakers, which hit the market just last week. it was a surprise for starbucks, as the machines topped sales expectations. the machines go for $199 a pop. trouble is brewing in the beer industry. beer sales dropped 1.3% in 2011. domestic light and regular brews are losing some froth as consumers are saying bottoms up more often to craft and specialty varieties, which rose 11%. "the high-end consumers are doing really well, and as a result, a lot of the higher-end premium and super-premium beers are doing well, while the mainstream consumer is still struggling. i think that want's reflected in the beer category as well." that was david henkes of restaurant consultant group technominc. he suspects more u.s. beer-makers will be buying craft beer-makers to win back customers. warning of a future bacon
shortage is still under speculation. some argue that rumors of a bacon shortage are still to come, politics, money and market speculation top today's traders unplugged. a knock-down, drag-out fight on these topics is coming up later. but first... the u.s. and europe head to the course to tee off in a golf tournament. what the competition is telling us about global economies. paul eggers reports next. we are this close...
the paris auto show comes at a tough time for european automakers. car companies in europe are bracing for a drop in sales. but that didn't stop the spotlight from shining on the city of lights for one of the nation's largest car shows. high-end auto mobiles from bentley, lamborghini and jaguar were rolled out this week, as auto makers target drivers of luxury automobiles. the show comes at a time when new car registrations in the region have slowed 7%. teams from europe and the u.s. are teeing off for the ryder cup this week. this year's match is happening just outside of chicago. paul eggers reports on how the economy is coming into play on the golf course. a gallery of more than 40,000 golf fanatics from across the u.s. and europe will visit medinah country club each of the next three days for golf's premier team event. and they'll pay big bucks for the privilege. "our condo is about $2,000 for the week, our tickets were
$700...probably in the vicinity of $3-4,000. the ryder tickets and all gets into about a few thousand dollars real quick." the dollars spent here offer a sharp contrast to tough economic conditions in both regions. in europe, the concern remains the sovereign debt crisis. "right now they need to rethink the way they pay for the public services, healthcare, pension systems, the education system. the money simply is not there any more to support all that." while the u.s. continues to struggle with an unemployment rate above 8%. "we have been suffering in an economy that has not been performing up to standard for a long time, almost more than 5 years at this point." adolfo laurenti of mesirow financial is more optimistic on prospects for growth in the u.s.. but he warns partisanship in washington may derail those hopes. "the fiscal cliff that everyone is fearing"
that political division in dc contrasts with unity among european leaders, and that togetherness may help make a positive difference for the economy. "germans do not like the idea that they have to pay the debt of the greeks, the italians, and the spaniards." as for his picks for this weekend's golf tournament, the italian economist will actually be paying more attention to the american pastime. as for the region that can bring the best returns, jack ablin, chief inveatment officer of harris private bank, says u.s. large-cap equities is his favorite sector. europe is his least favorite. reporting from the ryder cup, i'm paul eggers, first business news. a comparison reveals the 27 eu countries have a larger gdp, more fortune 500 companies and actually attract more u.s. investment. still ahead, with the election just months away, hear how
use just about anything for a trading opportunity, so round one: an election trading opportunity. intrade.com gives president obama a 75% chance of winning. are you a buyer or seller of that stat? > > i just want to talk about how legitimate these prediction markets are. it's offshore, so people don't actually put money on who they think is going to win. it's gone from 70% to 75%, so i think obama's getting a little bit over-bought. not that i think romney is going to win, but i think there's some opportunity here. > > i have to disagree with you, and i really do, because i think the price is efficient, i think obama being 75% is the ultimate sign of crowdsourcing together. you can't say one's overvalued, one's undervalued. > > if you look at the chart, the chart would have broken the trend line at 40 for romney. markets often come back to their break-out point, so- > > i'm just saying it's the ultimate source for crowdsourcing. undervalued,
overvalued, we'll find out in a few weeks. > > it is what it is. > > yes. > > round two: oil spill. crude oil has dropped around 10%. where is the outrage? people are so angry when those speculators step in and move oil to the upside. now that it's moving down, where are they? > > you know, as much as i dislike all the kind of high- frequency trading out there, it's funny that you hear nothing about speculation at all. we need speculators. that's probably another thing we can agree on. you need speculation in the market. we don't hear anything about it right now. > > with all the liquidity, it's just so ironic that nobody says one peep- > > round 3: the government's portfolio. the government still has stakes in gm and aig on the books. do you buy or sell those stocks? > > the first thing i want to point out is tarp made money, and a lot of money. they put $245 billion into the banks, and they've gotten $266 billion out already, and they still have $10 billion on the books. > > they have no business making money off this. it's not
a central bank policy tool. > > do not sell gm at a loss right now. we can afford to wait. we have a little bit of a cushion to wait to see if it comes back up. > > i'm going to stand up and be counted. i still own aig. i'm embarrassed to say that my break-even is about $85 a share, but i'm not the u.s. government. > > that wasn't a trade, that was an investment. because it went against you, you didn't have an exit plan. but, looking at the charts, i think aig is at its highest essentially for the year, whereas gm is finding a good, solid support base at $20. and i believe in america. i don't know about you. > > i believe in america as well, but america has no business using the stock market as a central bank policy tool. it sounds like you do. > > it makes money. > > bonus round, on that note: old money. the government has to reprint $500 million worth of currency each year because money has a short life span. on average, how long do you think a one-dollar bill will last? > > three to six months in my opinion. > > probably a little bit less than that, at least in my wallet it stays in a little bit less. > > because it gets folded up and stuffed way back inside your wallet. > > the answer is 18 months. thanks for being on the show. > > you're welcome. > > thank you. don't go anywhere. up next, a stock that looks like it's building a stairway to heaven. chart talk is next.
if you have any doubts about what is going on in the housing sector, take a look at the chart in lennar. joining us now, scott bauer says this is a stock to watch. good morning scott. > > good morning angie. > > what do you think is going to happen with this stock? it's unbelievable. it looks like stairsteps all the way up. > > right. it's a slow grind up, which is actually a good thing, rather than seeing dramatic changes up or down. look at the entire home-building space. when lennar released earnings, they actually were not up to snuff with what was expected. but going forward, their guidance was great. i believe what a big issue is is what they have as "future booking." deposits that have been made on future developments and future housing, they don't
actually count that in their revenue stream right now. so, that number far exceeds what expectations were, but since the dollar amount from that is not included in revenues, i think that's where the shortfall came up here. but like you said, this chart has been just this really nice stairstep. look at it, it's up at $37, $38 now, and probably not going to retreat any time soon. just look at the entire space, and i still think there's a lot of room to grow there in that space. so you would buy at the current level? > > i would. i absolutely would. i think the prospects are actually very good. > > what's your price target? > > i don't really give expectations here, but if i had to guess, i would think this thing would top $40 by next quarter. > > good to have you on the show today. that's scott bauer of trading advantage. have a good one. > > you too angie. it's closing time for our show today. coming up monday, a futures trader will be here with trading ideas on gold and other heavy metals.